Judge: Serena R. Murillo, Case: BC619884, Date: 2022-08-24 Tentative Ruling
Case Number: BC619884 Hearing Date: August 24, 2022 Dept: 29
TENTATIVE
The Motion for
Distribution of Attorney’s Fees filed by Plaintiff Hamid Ouhane is GRANTED.
Legal Standard
“Unlike a judgment creditor’s lien, which is created when
the notice of lien is filed [citation], an attorney’s lien is a ‘secret’ lien;
it is created and the attorney’s security interest is protected even without a
notice of lien. [Citations.]” (Carroll v. Interstate Brands
Corp. (2002) 99 Cal.App.4th 1168, 1172.) “A lien in favor of an
attorney upon the proceeds of a prospective judgment in favor of his client for
legal services rendered has been recognized in numerous cases.” (Cetenko
v. United California Bank (1982) 30 Cal.3d 528, 531.) “In California,
an attorney’s lien is created only by contract – either by an express provision
in the attorney fee contract or by implications where the retainer agreement
provides that the attorney is to look to the judgment for payment for legal
services rendered [citations].” (Carroll 99 Cal.App.4th at
1172.) For liens created in a contingency fee contract, a cause of action
to enforce the lien “does not accrue until the occurrence of the stated
contingency.” (Fracasse v. Brent (1972) 6 Cal.3d 784, 792.)
The attorney’s lien survives even after discharge, although the attorney’s
recovery is limited to the reasonable value of services actually performed
(i.e., quantum meruit), rather than the full percentage specified in the
contract. (Id. at 786.)
Discussion
McElfish argues that everything in this
case, except for the division of attorney’s fees, has been resolved and paid.
Plaintiff’s former attorneys in this case, Henry Sack and Hess Panah were
discharged. Sack, Panah, and McElfish Law Firm have all asserted a lien for
their attorney fees and costs in representing Plaintiff. Accordingly, McElfish
argues that the contingency fee contracts between Plaintiff’s former counsels
and Plaintiff are void and unenforceable because Plaintiff signed and executed
a valid contract retainer with McElfish Law Firm. As such, McElfish argues that
he is entitled to $224,550 in attorney’s fees, and that Sack and Panah may only
be entitled to a Quantum Meruit fee based on the reasonable value of the
actual work they performed, and not the contractual fee.
Plaintiff initially retained Sack as
his attorney to represent him in this matter. On or about March 30, 2017, a
Substitution of Attorney was filed in the Court substituting Panah into the
case as Plaintiff’s new counsel. On or about June 28, 2017, McElfish filed a
Notice of Association of Counsel with Panah’s office and were associated in as
trial counsel at that time. On or around August of 2020, Plaintiff’s relationship
with Panah deteriorated, and Plaintiff insisted on signing both a new retainer
with McElfish and a Substitution of Attorney naming Panah as his former counsel
in this matter, which was executed by McElfish Law Firm and Plaintiff.
On August 19, 2020, Plaintiff signed a retainer agreement
with McEflish Law, whereby Plaintiff agreed to pay McEflish Law on contingency
in the amount of forty (40%) of all amounts received prior to filing a lawsuit,
forty-five percent (45%) of the gross recovery if the claim is settled before
depositions, and then fifty percent (50%) if the case goes to mediation,
arbitration or trial. (McElfish Decl., Exh. E.)
As discussed above, the amount recoverable by counsel
through an attorney’s lien is limited to the reasonable value of services
actually performed, rather than a full percentage specified in a retainer
agreement. (Fracasse 6 Cal.3d 784, 786.) As such, the Court
finds that Sack and Panah are entitled to the reasonable value of services
actually performed.
The Court notes that Sack has submitted a statement which
shows the hours spent on behalf of his former client. (Opp., Exh. F.) However,
Sack seeks to recover costs and expenses incurred outside of its representation
of Plaintiff (after March 30, 2017), including fees to deliver the file to
Panah, letters regarding the substitution, and conversations in 2022 regarding
the fees. Accordingly, the court finds such costs unreasonable. Sack is entitled only to a quantum meruit fee for his services rendered from May 20, 2014 through March
30, 2017.
Conclusion
Based on the foregoing, Plaintiff’s motion for distribution
of attorney fees is GRANTED.
Moving party is ordered to give notice.